The ongoing property struggle

Category:
Mortgages

Updated:
11/02/2014
First Published:
07/02/2014

MONEYFACTS ARCHIVE

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old so the content may be out of date.

Helping their children get on the property ladder may be a long way from people's minds as they struggle to buy a house themselves, but according to a report form HSBC the two are intrinsically linked.

The traditional age for buying a first home is between 25 to 36, but this generation is now split into two categories – those that already own a property and those that don't.

The average age of the first-time buyer is currently 29, and those that are lucky enough to have been able to afford a property are likely to have been saving for around two years and eight months. The Bank of Mum and Dad has also come into play for around 64% of first-time buyers, with parents coming to the aid of those struggling for a deposit.

On the other side are those that have been unable to get a footing on the property ladder, with many not expecting to be able to buy their first home until they reach 35. This may not seem too surprising when bearing in mind increasing prices and economic struggles, but later down the line this could have quite an effect.

According to the research, those that managed to get on the ladder early will be trading up and buying a family home by the age of 35, while it will take late-comers another seven years to reach this stage. As an ongoing knock-on effect, those buying late will still be paying their mortgage off at 67, whereas others will be mortgage free at around 60.

This financial freedom in later life then sets the contract between having the opportunity to help their children enter the property market or not, thus beginning the cycle all over again.

Pete Dockar, head of mortgages at HSBC, said:

"Home ownership continues to be an aspiration for the majority of young people. This study shows postponing their purchase has long term implications not just for their future property ownership, but their ability to help their own children step onto the ladder.

"Deposits remain an essential ingredient to getting a mortgage, but in comparison to previous generations affordability is still healthy, so first-time buyers can feel confident about making their first step."